A Study On Financial Performance Analysis of Carborundum Universal LTD by Sowmiya P Register No. 412518631092

A STUDY ON FINANCIAL PERFORMANCE ANALYSIS OF
CARBORUNDUM UNIVERSAL LTD

By
SOWMIYA P
Register No. 412518631092
Of
SRI SAI RAM ENGINEERING COLLEGE
A PROJECT REPORT
Submitted to the
FACULTY OF MANAGEMENT SCIENCES
In partial fulfilment of the requirements
For the award of the degree
Of
MASTER OF BUSINESS ADMINISTRATION
ANNA UNIVERSITY
CHENNAI – 600 025
JUNE 2020
BONAFIDE CERTIFICATE
This is to certify that this internship titled “A STUDY ON FINANCIAL PERFORMANCE

ANALYSIS OF CARBORUNDUM UNIVERAL LIMITED “is a bonafide work
of SOWMIYA P (Register Number:412418631092 ) who carried out under my supervision.
Certified further, that to the best of my knowledge the work reported herein does not form part of
any project report or dissertation on the basis of which a degree or award conferred on an earlier
Occasion on this or any other candidate.
Dr. S. SANKAR Dr. K. MARAN
Signature of the Guide Signature of the Director
INTERNAL EXAMINER EXTERNAL EXAMINER

DECLARATION
I, SOWMIYA P, hereby declare that the project report, entitled “A STUDY ON FINANCIAL
PERFORMANCE ANALYSIS OF CARBORUNDUM UNIVERSAL LIMITED.,”
submitted to the Anna University Chennai in partial fulfillment of the requirement for the award
of the degree of MASTER OF BUSINESS ADMINISTRATION is record of original and
independent research work done by me during June 2020 under the supervision of
Dr. S. SANKAR Assistant professor, Department of Management studies, and it has not formed
the basis or other similar title to any candidate of any university.
Place: Chennai
Date:
(P.SOWMIYA)
ACKNOWLEDGEMENT
I am thankful to the management of SRI SAIRAM INSTITUTE OF MANAGEMENT

STUDIES which has imparted me sufficient knowledge and confidence to complete this project
in the field training.
I wish to express my deep sense of gratitude and indebtedness to our Chairman MJF. LEO
MUTHU and CEO - MR. SAI PRAKASH LEO MUTHU, Chairman Sri Sairam Groups of
Institutions, Chennai
I’m highly obliged to The Director of Sri Sairam Institute of Management Studies Dr. K.
MARAN for providing me the opportunity to embark on this project report
I wish to express my sincere gratitude to my Internal Guide Dr. SANKAR for his commendable
inspiring guidance, valuable advice, encouragement and motivation given to succeed.
I’m very grateful to all the faculty members of the department of management studies for their
encouragement and kind-hearted advice.
I would like to thank Mr. C. AIYYAPPAN manager of CUMI for permitting to do the project in
the company.
Finally, I thank my family members and friends who helped me in all possible ways to make this
project a success.
(SOWMIYA P)
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ABSTRACT
This Study involves the financial performance in CUMI the finance department functions which
are operated in the organization, what sources do they raise funds, in which factors they deploy
their funds, how the business is carried on. this project essentialism with the financial
performance of the concern for the period 2015 – 2019 and a clear cut analysis of what happened
that time is clearly shown in this report and also the financial tool are deployed in the manner to
present to accounting and statistical analysis are in this report the need is set to be lowest profit
percentage in the 5yr( i.e 2015 to 2019)and certain analysis are done and the finding are reported
to the organization which the company would seen fit to adopt those suggestion or else to be in
their reserved places and run the business, this project report also visualizes the every financial
aspect through ratio analysis and comparative statement and to forecast the future sales, net
assets , liabilities trend analysis is performed through the least square methods and also a
measure to find the financial position is computed and finding are given consolidated of these
analysis and as the organization is on the stage of development it may seems fit to have helped
them to maintain their standard to a next level to improve their business profit as it is so low and
venture into their subsidiary and other business as well. This report will provide an assessment
and analysis of the profitability, liquidity, performance and financial position using the figure
from the financial statements.
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TABLE OF CONTENT
ABSTRACT i
TABLE OF CONTENTS ii
LIST OF TABLES iii
LIST OF FIGURES iv
CHAPTER.NO. TITLE PAGE NO.
INTRODUCTION 1
1.1 Introduction of the Study 1
1.2 Industry Profile 3
1.3 Company profile 8
1.4 Review of Literature 13
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1.5 Need for the Study 19
1.6 Objectives of the study 20
1.7 Scope of the Study 21
1.8 Research methodology 22
1.9 Limitations of the study 26
DATA ANALYSIS AND INTERPRETATIONS 27

2.1 Financial Analysis 27
2.1.1 Ratio Analysis 27
II 2.1.2 Working capital 37
2.1.3 Comparative balance sheet 41
2.1.4 Common size balance sheet 45
2.2 Analytical analysis 46
2.2.1 Trend Analysis 46
SUMMARY OF FINDINGS, SUGGESTIONS AND
CONCLUSION
3.1 Findings 48
III
3.2 Suggestions 49
3.3 Conclusion 50
BIBLIOGRAPHY
APPENDIX
iii
LIST OF TABLES
S.NO TITLE PAGE NO

1.1 Table showing industry profile 3
1.2 Table showing company profile 8
2.1.1.1 Table showing current ratio 27
2.1.1.2 Table showing liquid ratio 28
2.1.1.3 Table showing fixed asset ratio 29
2.1.1.4 Table showing debt equity ratio 30
2.1.1.5 Table showing working capital turnover ratio 31
2.1.1.6 Table showing net profit ratio 32
2.1.1.7 Table showing fixed asset turnover ratio 33
2.1.1.8 Table showing debtors turnover ratio 34
2.1.1.9 Table showing net profit margin ratio 35
2.1.1.10 Table showing proprietary ratio 36
2.1.2.1 Table showing schedule of changes in the w.c.2015-2016 37
2.1.3.1 Table showing comparative balance sheet 2015-2016 41
2.1.4 Table showing common size balance sheet for five year 46
2.2.1 Table showing the trend value of working capital 47
2.2.2 Table showing the trend value of net profit 48
iv
LIST OF FIGURE
S.NO TITLE PAGE NO

1.1 Figure showing industry profile 3
1.2 Figure showing company profile 8
2.1.1.1 Figure showing current ratio 27
2.1.1.2 Figure showing liquid ratio 28
2.1.1.3 Figure showing fixed asset ratio 29
2.1.1.4 Figure showing debt equity ratio 30
2.1.1.5 Figure showing working capital turnover ratio 31
2.1.1.6 Figure showing net profit ratio 32
2.1.1.7 Figure showing fixed asset turnover ratio 33
2.1.1.8 Figure showing debtors turnover ratio 34
2.1.1.9 Figure showing net profit margin ratio 35
2.1.1.10 Figure showing proprietary ratio 36
2.1.2.1 Figure showing schedule of changes in w.c.2015-2016 37
2.1.3.1 Figure showing comparative balance sheet 2015-2016 41
2.1.4 Figure showing common size balance sheet for five year 46
2.2.1 Figure showing the trend value of working capital 47
2.2.2 Figure showing the trend value of net profit 48
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CHAPTER I
INTRODUCTION
1.1 INTRODUCTION TO THE STUDY:
Published financial statements are the only source of information about the activities and affairs
of a business entity available to the public, shareholder, investors and creditors, and the
governments. These various groups are interested in the progress, position and prospects of such
entity in various ways. But these statements howsoever, correctly and objectively prepared, by
therein. For this purpose, financial statements must be carefully studied, dispassionately analyzed
and intelligently interpreted. the enables a forecasting of the prospects for future earnings, ability
to pay interest, debt maturities both current as well as long-term, and probability of sound
financial and dividend policies.
According to Myers,” financial statements analysis is largely a study of relationship among the
various financial factors in business as disclosed by a single set of statements and a study of the
trend of these factors as shown in series of statements” thus, analysis of financial statements
refers to the treatment of information contained in the financial statement in a way so statements
as to afford a full diagnosis of the profitability and financial position of the firm concerned.
The process of analyzing financial statements involves the rearranging comparing and measuring
the signification of financial and operating data. Such a step helps to reveal the relative
signification and effect of items of the data in relation to the time and between two organizations.
Interpretation, which follows analysis of financial statements, is an attempt to each to logical
conclusion regarding the position and progress of the business based on the analysis. Thus,
analysis and interpretation of financial statements are regarded as complimentary to each other.
Financial Analysis is a process of synthesis and summarization of financial and operative data
with a view to getting an insight into the operative actives of a business enterprise. By
establishing strategic relationship between the components of the balance s and sheet and profit
and loss account and data, it unveils the meaning and significance of the various in the financial
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Statements the financial blue prints of a business concern. Financial Analysis consists of
comparisons for the same company over periods of time and comparisons of different companies
either in the same industry or in different industry. It may be done for the firm to assessment of
the strengths and weakness of the firms in various areas.
It helpful in assessing corporate excellence, judging credit worthiness, forecasting bond ratings,
predicting bankruptcy and assessing market risk. Focus of interest and purpose of analysis and
the nature of the information that they need for taking their decision. Shareholders and potential
investors use the analysis for investment decision purposes, lenders and suppliers have an
interest to know whether the company can pay back the amount they lend or supply customer are
interested in the company ability to sustain o that their warranty guarantee and quality of product
is ensured employees are interested knowing the position of the company so that their salary,
retirement benefit and other incentives and benefits are not in jeopardy.
Financial statements provided small business owners with the basic tool for determining how
well their operation always performs. Many entrepreneurs do not realize that financial statements
have a value that goes beyond their use as supporting documents to loan application and tax
returns. These statements are concise reports designed to summarize financial activities for
specified periods. Owners and managers can use financial statements analyzing to evaluate the
past and current financial conditions of their business, diagnose any existing financial problems
and forecast future trends in the firm’s financial position.
Evaluation pinpoints in financial terms where the firm has been and where it is today. Diagnosis
determines the causes of the financial problems that statements analysis uncovers and suggests
solution for them. Forecasts are valuable in statement analysis for two reasons: you can prepare
forecasts that resume that the basic financial facts about a company will remain the same for a
specified period in the future.
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1.2 INDUSTRY PROFILE:
Murugappa group founded in 1990, the INR 367Billion (36,893crores) Murugappa group is the
one of the India’s leading business conglomerates. The group has 28 businesses including nine
listed companies traded in NSE and BSE. Headquartered in Chennai, the major companies of the
group include “Carborundum universal ltd, Cholamandalam financial holdings ltd,
Cholamandalam investment and finance company ltd, Cholamandalam MS general Insurance
company ltd, Coromandel International ltd, Coromandel Engineering company ltd, EID parry ltd,
parry agro industries ltd” ,etc.
TABLENO: 1.2 INDUSTRY PROFILE
Type private
industry conglomerate
founded 1900,119 yrs ago
headquarters Chennai
Key people M.M.Muruappan

(executive chairman)
products Cycles, general insurance fertilizers,

abrasives
Automotives chain, car door frames,
steeltubes& gearboxes
revenue 36,893crores
website www.murugappa.com
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CHOLAMANDALAM LTD:
Cholamandalam investment and finance company Limited is a finance company Limited is a

financial and investment service provider in India. It is headquartered in Chennai and has 885
branches across the country. It is one of the 28 businesses under the Murugappa group. As of
2018, March the group has a revenue of Rs.5, 426 cores. The subsidiaries of chola are CSEC and
CHFL. The vision of chola I to enable customer enter a better life. Chola has a growing clientele
of over 8 laksh happy customers across the nation. Every since its inception and all through its
growth, the company has kept a clear sight of its values. The basic tenet of these values is a strict
adherence to ethic and a responsibility to all those who come within its corporate ambit
customers, shareholders, employees and society.
MURUGAPPA MORGAN THERMAL CERAMICS LIMITED:
Murugappa Morgan Thermal Ceramics Limited (MMTCL) is a joint venture between Morgan
Advanced Materials, UK, and Carborundum Universal Limited (CUMI) of the
MurugappaGroup.Using innovative design software and the best in installation tools, we are the
industry leader in end-to-end solutions for your heat management and passive fire protection
requirements. Our plants at Ranipet in Tamil Nadu and Moti Bhoyan in Gujarat churn out a
wide range of applications based on high temperature insulation and linings. MMTCL provides
customised solutions through design, supply and application capabilities in high temperature
insulation and passive fire protection markets. Ceramic Bulk Fibre, Blankets, Boards, Mastics
and Engineered Fibre are manufactured at Ranipet, Tamil Nadu. Our plant at Moti Bhoyan
manufactures Pyrobloc Modules, Spun Blankets and Continuous Ceramic Fibre Paper
COROMANDEL INTERNATIONAL LTD:
Coromandel international limited, India second largest Phosphates fertilizer player, is in the
business segments of fertilizer, specialty nutrients, crop protection and retail. The company
manufactures a wide range of fertilizers and markets Around 4.5 million tones making it a leader
in its addressable markets. In its endeavor to be a complete plant nutrition solutions company,
Coromandel has also introduced a range of specialty Nutrient products including Organic
fertilizers. The crop protection business products insecticides, fungicides and herbicides and
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markets these products in India and across the globe. Coromandel is the second largest
manufacture of Malathion and only the second manufacture of Phenthoate. Coromandel has
alsoventured into the retail business setting up around 800 rural retail centers in the states of
Andhra Pradesh, Telangana.
TUBE INVESTMENTS OF INDIA LIMITED:
Tube Investments of India Ltd (TII) has as its main business divisions cycles, metal forming,
tube products and chains .TII has spread its web of enterprise to cover not only the length and
breadth of India with a strong customer-centric network, but is also making footprints in the
international arena. Fun, fitness, freedom: this is the core promise of TI Cycles. The company
was established by the Murugappa Group in collaboration with Tube Investments (UK) in 1949.
Since then, TI Cycles has transitioned from being just a bicycle manufacturer to becoming an
industry expert in mobility and well-being solutions.
CHOLA:
Cholamandalam Investment and Finance Company Limited (Chola), incorporated in 1978 as the
financial services arm of the Murugappa Group. Chola commenced business as an equipment
financing company and has today emerged as a comprehensive financial services provider
offering vehicle finance, home loans, home equity loans, SME loans, investment advisory
services, stock broking and a variety of other financial services to customers. Chola operates
from 873 branches across India with assets under management above INR 42,900 Crores. The
subsidiaries of Chola are Cholamandalam Securities Limited (CSEC), Cholamandalam Home
Finance Limited (CHFL) and White Data Systems India Private Limited (WDSI).
MURUGAPPA ORGANO WATER SOLUTIONS LIMITED:
Amidst a rapidly growing Indian manufacturing sector, MurugappaOrgano Water Solutions is a

solution provider for rising industrial water treatment requirements. We are the result of a joint
venture agreement formed between Polutech Limited and Organo Corp of Japan, a market leader
in water purification systems and treatment technologies and equipment. A complete turnkey
solution provider, Polutech has been a leading player in the water treatment engineering services
in India. Its raw water and waste water treatment systems are top of the class, and the expertise
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has been built by executing projects over 30 years for diverse industries, from sugar and food &
beverage, to textiles and chemical.
WENDT INDIA LIMITED:
Wendt India limited is a joint venture between Carborundum Universal and Wendt They are
the leading manufacturer of Super Abrasives which include grinding wheels of Diamond and
Cubic Boron Nitride and special purpose grinding machines and tools. They offer functionally
superior products & services for grinding and machining hard–to–process materials. These
products find applications in industries like automobile, auto component, cutting tool,
construction, engineering, steel, tile, ferrite, glass, ceramic, textile, paper and aerospace sectors.
Wendt India draws its technological superiority from Wendt GmbH which is a part of Winterthur
Technology Group (WTG) Switzerland and its ethical management practices from the
Murugappa Group.
COROMANDEL ENGINEERING:
Incorporated in the year 1947, Coromandel Engineering was one of the early entrants into the
business of construction. Coromandel Engineering, in its vast experience of 68 years, has
constructed some of the landmarks such as the LIC building on Anna salai and Cholasheraton on
TTK road in Chennai, Holiday Inn and ITC Windsor manor hotel in Bangalore. On the industrial
construction front, Coromandel Engineering has constructed various manufacturing plants,
process plants, cement plants and power plants and emerged one among the leading Construction
Companies in Chennai.Among the huge clientele, it is fortunate to have worked with some of the
leading brands such as the Tata group, Ramco Cements, Daimler India commercial vehicles,
Aditya Birla group, Mahindra group, DCW Limited and ITC group.After its inception,
Coromandel engineering’s first project was the Wellington nursing home, now known as
“SankaraNethralaya”.
AMBADI ENTERPRISES
For elegant, colorful and unique home furnishings, Ambadi Enterprises has been the supplier of
choice since 1985. We merge traditional skills with modern technology to create novel products
that command a premium. Through the shopping lists of renowned brands and international
retailers, our home furnishings find a place in hearths across the globe. We also deal with a range
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of floor coverings like carpets, dhurries, rugs, shaggys and mats in addition to textile fabrics like
curtains, drapes, cushion and pillow covers, bed and table spreads, quilts, runners and napkins,
among other products. Our designs, imagined to perfection in collaboration with international
know-how, are crafted with care at our state-of-the-art manufacturing facilities in Panipat,
Badhohi and Kannur.
We are one of India’s biggest exporters of textile fabrics, home linen and floor coverings.
Reinforcing this reputation , in 2011 – the company displayed the world’s largest apron (fabric
area 853 sq. metres, weighing 100 kgs) in Chennai, and entered the Guinness Book of World
Records.
PARRY AGRO INDUSTRIES LIMITED:
Parry agro, one of the leading producers of CTC, Orthodox, Organic and Green teas, in India is a
part of the Murugappa Group, which is among the most respected business conglomerate in
India. In a country that is the second largest tea-growing region in the world, parry agro has
estates across the best tea regions in India. In south India, our estates are spread across
Sheikalmudi, Mutually, in the Anamallai hills. Spread over 3,210 hectares, the tea estates and
factories at parry agro produce around 14 million kilograms annually. Over the last five decades,
the brand’s reputation as one of the premier tea growers has been well established across the
globe. The reputations and respect we enjoy stem from the fact that we, at parry Agro, are
committed to quality. Strict adherence to quality protocol is the cornerstone of our business.
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1.3 COMPANY PROFILE:
“CARBORUNDUM UNIVERSAL LIMITED (CUMI)”
ABOUT COMPANY:
Carborundum universal Ltd, a part of the Murugappa group, is the one of the largest and oldest
conglomerates in India. CUMI is the leading manufactures and developer of the abrasives,
ceramics, Refractory’s Aluminums oxide grains, machines tools, polymers, adhesives and electro
mineral in India. CUMI I the only abrasive manufactures with the diversification.
TABLE NO: 1.3 COMPANY PROFILE
Type Public
Industry Engineering
Founded 1954
Headquarters Chennai, Tamil Nadu,

India
Key people M. M. Murugappan
Products Abrasives, electro minerals,

industrial ceramics, super
refractory.
Revenue INR 22 billion(2014)
(as on 31 march 2014)
Parent Murugappa Group
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CUMI was established as result of diversification from banking business through cycle
manufacturing with the intent to manufacture abrasive materials. CUMI’s parent company, the
murugappa group, made a tie up with the carborundum, UK, a subsidiary of American abrasive
manufacturer, Carborundum, USA and the Universal Grinding co. Ltd, UK in 1950. The result
was the Carborundum universal of Madras.
Then it was renamed and incorporated in 1954 a carborundum universal Ltd. Initially CUMI was
founded to manufacture the core product for the collaborating companies. Later the company
established its first bonded Abrasive plant at Chennai with the facility acquired from Ajax
products and began its manufacturing process in the abrasives platforms. Our focus on quality is
evident from a portfolio of prestigious national and international certificate that we have earned
over the years. With an annual throughput of 14 million kg produced from 3211 hectares, Parry
Agro accounts for 1.2% of the tea produced in India. We are not just content with the production
of tea, but producing safe teas.
Today the company’s range of over 20,000 different varieties of abrasives, refractory products
and electro-minerals are manufactured in ten locations across various parts of the country. With
state-of-the art facilities and strategic alliances with global partners, CUMI has achieved a
reputation for quality and innovation. CUMI is one of the few manufacturers in the world with
fully integrated operations from mining, fusioning, manufacturing, marketing, distribution, to
power generation from wind and hydro power stations. Almost all of CUMI’s ten manufacturing
facilities have received the ISO 9001:2008 accreditation for quality standards. A well connected
marketing and distribution network of offices and warehouses in India and abroad ensure that
service to customers is given prime importance. With constant innovation and product
upgradation, through in-house R&D and strategic alliances with global leaders in grinding
technology, CUMI has ensured its market leadership both in India and abroad. It has also gained
international recognition as a manufacturer of quality abrasives and a provider of total grinding
solutions.
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PRODUCT PROFILE:
The CUMI Company manufactures the products such as Abrasives, electro minerals, industrial
ceramics, and super refractory. The range of product application of different division, wear
resistant, heat resistant, liners and metalized ceramics by the ceramics division, heat resistant,
containment products from super refractory division and the raw materials for abrasives and
refractory by the electro minerals division.
1. ABRASIVES:
An abrasive is a material, often a mineral that is used to shape or finish a work piece
through rubbing which leads to part of the work piece being worn away by friction.
While finishing a material often means polishing it to gain a smooth, reflective surface,
the process can also involve roughening as in satin, matte or beaded finishes.
 COATED ABRASIVE:
Coated abrasives is an abrasives grain bonded to a flexible substrate using

adhesives common substrates are paper, cloth, vulcanized fiber, and plastic films
and come in grits sizes range from very coarse to ultrafine.
 SYNTHETIC RESIN:
Synthetic resins are industrially produced resins, typically viscous substances that
convert into rigid polymers by the process of curing. In order to undergo curing,
resins typically contain reactive end groups such as acrylates or epoxides.
 METALWORKING FLUIDS:
Metalworking is the process of working with metals to create individual parts,

assemblies, or large-scale structure. The term covers a wide range of work from
large ships and bridges to precise engine parts and delicate jewelry.
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2. CERAMICS:
A ceramics is a solid materials ranges from highly oriented to semi crystalline vitrified
and often completely amorphous. Most often, fired ceramics are either vitrified as is the
case with earthenware, stoneware and porcelain.
 HIGH ALUMINA:
Aluminum oxide is a chemical compound of aluminum and oxygen with the

chemical formula. It I the most commonly occurring of several aluminum oxides
and specifically identified as aluminum oxide.
 REACTION BONDED SILICON CARBIDE (RbSiC):
Reaction bonded silicon carbide also known as siliconized silicon carbide is a

type of silicon carbide that manufactured by a chemical reaction between porous
carbon or graphite with molten silicon.
 ZIRCONIUM DIOXIDE:
Zirconium sometimes known as zirconia is the white crystalline oxide of

zirconium. Its most naturally occurring form with a monoclinic crystalline
structure is the mineral baddeleyite. A dopant stabilized cubic structured zirconia,
cubic zirconia is synthesized in various colors for use a gemstone and a diamond
stimulant.
 YTTRIA-STABILIZED ZIRCONIA (YSZ):
Yttria-stabilized I a ceramic in which the cubic crystal structure of zirconium

dioxide is made stable at room temperature by an addition of yttrium oxide. These
oxide are commonly called “zirconia”.
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3. ELECTROMINERALS:
A mineral is broadly speaking a solid chemical compound that occurs naturally in pure
form. Mineral are most commonly associated with rocks. These rocks may consist of one
type of minerals or may be an aggregate of two or more different types of minerals
specially segregated into distinct phases.
 CALCINATION:
The IUPAC defines calcinations as heating to high temperatures in air or oxygen.

However, calcinations is also used to mean a thermal treatment process in the
absences or limited supply of air or oxygen applied to ores and other solid
materials to bring about a thermal decomposition.
A calciner is a steel cylinder that rotates insides a heated furnace and performs
indirect high-temperatures processing within a controlled atmosphere.
 MULLITE:
Mullite is a rare silicate mineral of post clay genesis. It can form two
stoichiometric forms. Unusually mullet has no charge balancing cation present.
As a result there are three different aluminium sites the two distorted tetrahedral
and one octahedral.
 BAUXITE:
Bauxite is a sedimentary rock with a relatively high aluminum content. It is the

world main source of aluminium minerals gibbsite boehmite and diaspore mixed
with the two iron oxides goethite and haematite the aluminium clay mineral
kaolinite and small amount of anatase and limonite.
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1.4 REVIEW OF LITERATURE:
Financial performance analysis is vital for the triumph of an enterprise. Financial performance
analysis is an appraisal of the feasibility, solidity and fertility of a business. Out of the
innumerable studies available on the subject some of the most appropriate studies have been
revived. Financial ratios are important indicators of the company’s health and are widely used by
the investors and financial analyst to evaluate company’s financial conditions.
JAGANNADHA RAO (1991)
Jagannadha Rao (1991) in his study states that there is poor state of financial performance of the
company is the cumulative result of unfavourable factors such as continuous low capacity
utilization of the units, fall in sugar recovery in some of the units, poor operational performance,
high cane price advised by the State Government and paid up by the company, low levy price of
sugar. Remedy for the poor financial performance is rather a stupendous task. Not all-sided
approach is required: better the operational performance of the sugar units particularly the sick
units, paying reasonably high cane price, reducing the cost of production by improving capacity
utilization, and taking advantage of free quota to make good the losses suffered due to low levy
price.
KAKANI et al.( 2001):
Kakani et al.( 2001) examined the determinants of firm performance for 566 Indian firms. They
tool ROA, ROCE, cash flow ratio, Sales to asset, gross profit margin, net profit margin, return on
Net worth etc., as dependent variable and size, age, leverage, working capital ratio, business
group affiliation etc., as determinants of firm performance and found that size, market
expenditure and international diversification had a positive relation with market valuation for
firms. A firms ownership composition, particularly the level of equity ownership by domestic
financial Institutions and Dispersed public shareholders, and the leverage of the firm were
important factors affecting its financial performance.
KRISHNA PRASAD UPADHYAY (2004):
Krishna Prasad Upadhyay (2004) used different types of financial ratios to check up the financial
performance of the selected finance companies. Basically in this study he used solvency ratio,
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liquidity ratio, efficiency ratio, profitability ratio and valuation ratio. Different measures like
return on investment, return on equity, return on assets, earning per share, dividend per share,
and asset utilization ratio are used to assess the profitability of the companies. He concluded his
study stating that the solvency position of both companies is not sound and credit creation
capacity is good in both the companies in aggregate.
BALA RAMASWMY, DARRYLONG AND MATTEW C.H. YEUNG (2005):
Bala Ramaswmy, Darrylong and Mattew C.H. Yeung (2005) has found empirical evidence that
firm size and the firm ownership are important determinants of financial performance in the
Malaysian palm oil sector-findings lend support to industry analysts who have highlighted that
profitability is higher in privately owned firms.
WOO GON KIM, BAKER AYOUN (2005):
Woo Gon Kim, Baker Ayoun (2005) the study attempts to investigate the technique applied in
this industry. Hospitability – related industry segments may comprise hotels, restaurants, airlines,
and other amusement and recreational services. The objective of the study is to provide
information to a variety of entities that might be interested in comparing major financial
characteristics of companies on its different segments. The researcher used financial ratios, time
series and Multivariate analysis of variances’ test as statistical tools. The study concludes that
increased volatility of hospitability industry due to unpredictable external environment for the
past four to five years. More volatile trends are depicted for the other three segments over the
time period of this study.
MYUNG KO AND CARLOS DORANTES (2006):
Myung Ko and Carlos Dorantes (2006) investigates the impact of information security breaches
on firm performance. To evaluate the financial impact of security breaches related to confidential
information, the “matched sample comparison group” method is used. The researcher used ratios
and two cost related ratios and percentage of change in sales and operating income to see if these
measures are better indicators for identifying differences in performance considering the context
of this study. Profit ratios have been the most commonly used as performance measures.
Jose M. Moneva, Juana M. Rivera-Lirio, (2007):
Jose M. Moneva, Juana M. Rivera-Lirio, (2007) Maria J. Munoz-Torres analyses the mission
statements and the sustainability reports, of a sample of 52 Spanish listed firms. Some traditional
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financial and economic-indicators are used to analyze the company’s financial performance.
Results show a not very high level of the stakeholder approach in Spanish companies a high level
of publication and quality of sustainability reports and, finally, a positive and not significant
relationship between these variables and a positive financial performance.
NEUMANN AND ROBERTS (2008):
Neumann and Roberts (2008) argued that financial measures are given more value over non-
financial measures and ROI is the single performance measures to which managers give more
weightage.
EFENDIOGLU. M (2010):
Efendioglu. M (2010) explores the impact of strategic planning on financial performance of
major industrial enterprises of Turkey. This paper is one of the few studies to examine the
strategic planning process in a sample of firms from a transitional economy. It can be considered
a longitudinal study because it examines a set of institutions to identify changes in their
performance overtime, as they incorporate the use of strategic tools in a dynamic competitive
environment. The research sample was drawn from the Turkish chamber of industry database
which listed the top 500 manufacturing firms in 2006. The findings of this study provide
contribution to our understanding of the nature and practice of strategic planning in Turkish
companies and possibilities of correlations between their efforts and performance.
MAHDI SALEHI, MEHRDAD ALIPOUR AND MORTEZA RAMAZANI (2010):
Mahdi Salehi, Mehrdad Alipour and Morteza Ramazani (2010), the objective of the article is to
establish the extent to which just-in-time may effect to Iranian company’s financial performance.
The researcher used regression analysis as statistical tool. Eventually the researcher concludes
that the application of the JIT system in Iran increases the financial and non financial
performance of the companies. Because of the weakness in performing the JIT, they cannot
benefit from it. The researchers strongly suggest that the barriers of performing the JIT system
must be identified and removed as soon as possible, so that the Iranian companies increase their
financial performances.
VERDI ALI (2010):
Verdi Ali (2010) identifies whether this company has a strong financial fundamentals and
whether investment in the company will be of a long term nature. Its financial statements had
16
been analyzed during 5 years period (2004-2008). Financial analysis has been measured by
various ratios. The study concludes that current ratio has declined in the last 4 years. However, it
is still well above the industry level, and it maintains a good level of liquidity.
HASSAN MOBEEN ALAM, ALI RAZA AND MUHAMMAD AKRAM (2011):
Hassan Mobeen Alam, Ali Raza and Muhammad Akram (2011) examinen financial performance
of leasing companies since 2008 to 2010. Ratio analysis technique has been used to evaluate
financial performance of leasing companies. All data has been retrieved from securities &
Exchange commission of Pakistan, Asian financial service association, Leasing Association of
Pakistan, State Bank of Pakistan, and leasing company’s websites. Nine companies are selected
for analysis out of fifteen and this study covers three year period ((2008,2009 and 2010) . The
researcher used ratios as statistical tools. This study concludes that in 2010 the financial ratios
are showing the positive change but there is a decline in financial performance of leasing
companies in 2009 when compared to 2008.
HASSAN MOBEEN ALAM, ALI RAZA AND MUHAMMAD AKRAM (2011):
Hassan Mobeen Alam, Ali Raza and Muhammad Akram (2011)) aims to identify the financial
strengths and weaknesses of the Indian public sector Pharmaceutical enterprises by properly
establishing relationships between the items of the balance sheet and profit and loss account. The
study has been undertaken for the period of twelve years from 1997-98 to 2008-09 and the
necessary data have been obtained from CMIE database and public enterprises survey. In order
to analyze the financial performance in terms of liquidity, solvency, profitability and financial
efficiency, various accounting ratios have been used. Various statistical measures have been used
(ie) Mean, Standard deviation, co-efficient of variation, linear multiple regression analysis and
test of hypothesis t-test. From the study it can be concluded that the liquidity position was strong
in case be concluded that the liquidity position was strong in case of KAPL and it was so poor in
case of RDPL thereby reflecting the ability of the companies to pay short-term obligations on
duedates. The study will help investors to identify the nature of Indian Pharmaceutical industry
and will also help in taking decision regarding investment.
SURESH VADDE (2011):
Suresh Vadde (2011) analyses the performance of non-government financial and investment
companies (other than banking, insurance and chit-fund companies) during the year 2008-2009.
17
The segment of financial and investment companies in the private corporate is highly skewed.
For the study data are collected from various issues of RBI Bullentin regarding financial and
investment companies. The study is based on the audited annual accounts of 1215 companies. It
was observed from the consolidated result of the select 1211 non-government financial and
investment companies that growth in income, both main and other income, decelerated during
the year 2008-2009. Business of selected non-banking financial and investment companies
expanded at a slower pace during 2008-09. Its share in total uses of funds decreased. The share
of Investments in total uses of funds increased during 2008-09 on account of investments in the
mutual funds and share and debentures of other Indian companies.
DHULIA HIRENKUMAR KANTILAL (2012):
Dhulia Hirenkumar Kantilal (2012) conducted a study to analyze the financial position of
selected pharmaceutical companies in India. The study was based on the secondary data which
were obtained from the annual reports of the selected companies and related journals. After the
data collection processed and analyzed according to the outline hypothesis (‘F’ test) formulated
and proved with the use of statistical tools to arrive at certain conclusion. He concluded his study
that the gross profit ratio of different companies in different years is not same.
SHRABANTI PAL (2012):
Shrabanti pal (2012) also carried out a study on financial performance of Indian steel for a period
from 91 – 92 to 2010 – 11 to examine the financial performance of the Indian steel companies
and establish the linear relationship between liquidity, leverage, efficiency and profitability of
the selected companies. Multiple regression analyzes is conducted on fifteen financial ratios
selected from different segment like liquidity ratio, solvency ratio, activity ratio and profitability
ratio. He concluded his research that the company should concentrate to improve the overall
liquidity, solvency and efficiency to enhance the profitability to the maximum otherwise the
profitability of the companies will be affected in other way.
SHAJI.U AND G. GANESAN (2012):
Shaji.U and G. Ganesan (2012) made an attempt to study the overall financial performance of
selected public sector drug and pharmaceutical enterprises in India with the help of some
statistical measures(i.e) mean, standard deviation, coefficient of variance, linear multiple
regression analysis and test of hypothesis. The study revealed that the industry will witness an
18
increase in the market share. The sector is poised not only to take new challenge but to sustain
the growth momentum of the post decade.
VIVEK SINGLA (2013):
Vivek Singla (2013) made an attempt to compare the financial performance of the selected units
i.e. steel authority of india and TATA steel limited In present time greater importance is given to
financial performance. While analyzing the financial performance of the selected units, the study
analyses the working capital and also the profitability. The profitability analysis of selected units
has been made while using various ratios. The study covers a period of five years from 2007-08
to 2011-12. For completion of the study only secondary data has been used. The main sources
are annual reports, various books, newspapers, journals and websites. The study concluded that
after making the comparative analysis of both the firms they find that performance of TATA
steel limited is better than the SAIL, it is so because the net profit of TATA steel limited is
greater than the SAIL. Similarly the inventory management of the TATA steel limited is better
than the SAIL.
MS. M. GANGA (2015):
A study has been undertaken by Ms. M. Ganga(Ms.M.Ganga, 2015) on the evaluation of

financial performance of Equitas Micro Finance Private Limited in Chennai. According to them
Financial analysis is important to plan and control the firm’s financial resources. They adopted
various research techniques to find the evaluation of financial performance of the organization.
They found that the managers must concentrate on gray area which would be useful for future
growth of the company.
DR. M. RAVICHANDRAN (2016):
According to Dr. M. Ravichandran (Dr. M. Ravichandran, 2016) the financial performance can
be measured by using various financial tools such as profitability ratio, solvency ratio,
comparative statement, etc. Based on the analysis, findings have been arrived that the company
has got enough funds to meet its debts & liabilities, the income statement of the company shows
sales of the company increased every year at good rate and profit also increased every year.
19
1.5 NEED FOR THE STUDY:
Financial statement analysis is an important tool for measuring the financial performance of a
company. The main aspect of financial management is working capital management and ratio
analysis it should be done on day to day basis.
Finance is regarded as the life blood of business enterprises thus it is important to analyze the
financial performance of a business enterprise. Financial performance analysis is helpful to the
management in knowing the financial strength and weakness of the firm.
As there are fluctuations in net profit, newsprint production, capacity utilization and working
capital over the past five years it has become necessary to analyze the financial performance of
the company.
so as to known the financial strength and weakness of the company and to know the growth of
the company in financial and others aspects. This study will facilitate the management in framing
sound financial policies and will help the company to know their financial strength and
weakness.
Financial ratios are used almost universally by companies of all sizes to provide numerical
information on the profitability, health and direction of the business. Financial ratios provide
useful analysis and can help drive management towards making better decision if they are
interpreted correctly. However, there are some drawbacks to relying on these metrics.
It also includes lack of comparability between companies, no indication of cause of changes,

ratios based on book value, no measurement of management quality.
Hence the company permits me to do in the area of finance. The study helps to review the
financial performance of the company.
20
1.6 OBJECTIVES OF THE STUDY:
PRIMARY OBJECTIVES:
 To analysis the financial performance of Carborundum universal Ltd (CUMI).
SECONDARY OBJECTIVES:
 To study the growth of CUMI company.
 To identify the variability in profitability, liquidity, Solvency position in the

CUMI.
 To examine the operational competence of CUMI.
 To study the investment pattern of the company.
 To give suggestions to improve the overall performance.

21
1.7 SCOPE AND SIGNIFANCE OF THE STUDY:
The scope of the study is to have an idea about financial performance analysis of CUMI. Those
who are looking for the information about financial performance analysis of CUMI might get
help from this report.
The study explores the present market scenario of CUMI Company any future market growth
prospective in Chennai. This will helpful for the company to know about their financial
performance and try to bridge the gap between expected and actual performance.
The study will help the company to know this long-term and short-term solvency so, that it can
increase their assets .Accordingly and outcome of the study help to know the efficiency of the
firm with help of various financial tools.
This study also helps to know the market position of the competitor and also to know their
strength and weakness of the company. The company growth is measured by comparing and
analyzing previous year financial year.
22
1.8 RESEARCH METHODOLOGY:
1. MEANING OF RESEARCH:
The systematic investigation into and study of materials and sources in order to establish
facts and reach new conclusions.
2. DEFINITION OF RESEARCH:
Research is a careful and detailed study into specific problem concern or issue using the
scientific method. It’s the adult form of the science fair project back in elementary
school, where you try and learn something by performing an experiment. This is best
accomplished by turning the issues into a question, with the intent of the research to
answer the question.
3. RESEARCH DESIGN:
This research design is analytical research. To prepare this report gathering data is very
important. The information was collected from secondary source of data. The
information was collected within the organization from CUMI.
4. ANALYTICAL RESEARCH :
Analytical research is a specific type of research that involves critical thinking skills and
the evaluation of facts and the information relative to the research being conducted. A
variety of people including students, doctors and psychologists use analytical research
during studies to find the most relevant information.
5. DATA COLLECTION METHOD:
This report is prepared based on information collected from secondary sources.
SECONDARY DATA:
 Annual Reports of CUMI
 Online data from CUMI website.
 Working papers
 office files
23
 Several articles related on financial analysis and selected books.
6. RESEARCH TOOLS:
Financial analysis:
 Ratio Analysis.
 Working capital.
 Comparative balance sheet.
 Common size balance sheet.
Statistical tool:
 Trend analysis
RATIO ANALYSIS:
1. CURRENT RATIO:
An indication of a company’s ability to meet short-term debt obligations; the higher the
ratio, the more liquid the company is. Current ratio is equal to current assets divided
current liabilities. If the current assets of a company are more than twice the current
liabilities, then generally considered to have good short-term financial strength. If current
liabilities exceed current assets, then the company may have problems meeting its short-
term obligations.
2. LIQUID RATIO:
Liquid ratio is also known as “Quick‟ or “Acid Test‟ Ratio, Liquid assets refer to assets
which are quickly convertible into cash. Current Assets other stock and prepaid expenses
are considered as quick assets.
3. FIXED ASSET RATIO:
Fixed Asset Ratio is the ratio of fixed assets after depreciation to total long term funds.
Here, the total long term funds means shareholders fund and long term fund.
24
4. DEBT EQUITY RATIO:
The debt-equity ratio is a measure of the relative contribution of the creditors and
shareholders or owners in the capital employed in the business. Simply stated , ratio of
the total long term debt and equity capital in the business.
5. WORKING CAPITAL TURNOVER RATIO:
Working capital turnover ratio is a ratio that measures how efficiently a company is using
its working capital to support a given levels of sales.
6. NET PROFIT RATIO:
The net profit percentage is the ratio of after-tax profits to net sales. It reveals the
remaining profit after all costs of production, administration, and financing have been
deducted from sales, and income taxes recognized. As such, it is one of the best measures
of the overall results of a firm, especially when combined with an evaluation of how well
it is using its working capital. The measure is commonly reported on a trend line, to judge
performance over time. It is also used to compare the results of a business with its
competitors.
7. FIXED ASSET TURNOVER RATIO:
Fixed asset turnover ratio is the ratio of sales to the value of fixed assets. It indicates how
well the business is using its fixed assets to generate sales.
8. DEBTORS TURNOVER RATIO:
It’s a accounting measures used to measures how effective a company is in extending

credit as well as collecting debts.
9. NET PROFIT MARGIN:
Net Profit Margin (also known as “Profit Margin” or “Net Profit Margin Ratio”) is a
financial ratio used to calculate the percentage of profit a company produces from its total
revenue. It measures the amount of net profit a company obtains per dollar of revenue
gained. The net profit margin is equal to net profit (also known as net income) divided by
total revenue, expressed as a percentage.
25
10. PROPRIETARY RATIO:
It’s the proportion of shareholder’s equity to total assets and as much provides a rough
estimates of the amount of capitalization currently used to support business.
TREND ANALYSIS:
It is a technique of studying the operational results and financial position over a series of years.
Using the previous years‟ data of a business enterprise, trend analysis can be done to observe the
percentage changes over time in the selected data. The trend percentage is the percentage
relationship, in which each item of different years bear to the same item in the base year. Trend
analysis is important because, with its long run view, it may point to basic changes in the nature
of the business.
WORKING CAPITAL:
Working capital also known as net working capital is the difference between a company’s
current assets, such as cash, accounts receivable and inventories of raw material and finished
goods and its current liabilities such as accounts payable.
COMPARATIVE STATEMENT ANALYSIS:
Comparative analysis is the study of trend of the same items and computed items into or
financial statements of the same business enterprise on different dates. Efficient management of
finance is very important for the success of an enterprise. The term financial performance is very
vibrant term. The subject matter of financial performance has been varying very quickly. In
present time greater significance is given to financial performance. So, an attempt is made by the
researcher to study the financial performance of the selected company.
COMMON SIZE STATEMENT ANALYSIS:
A common size financial statement displays all items as percentages of a common base figure
rather than as absolute numerical figures. This type of financial statement allows for easy
analysis between companies or between time periods for the same company. The values on the
common size statement are expressed as ratios or percentages of a statement component, such as
revenue.
26
1.9 LIMITATIONS OF THE STUDY:
 Due to inadequate time of research it is not possible to analysis all the aspects to the
study
 The approach may differ on calculation of certain items and analysis and interpretation of
the ratios, working capital, trends etc.
 Authorities were relevant to reveal information
 The date provided is secondary data
 Only 5yrs balance sheet were available for conducting the study.
27
CHAPTER II
DATA ANALYSIS AND INTERPRETATION
2.1 FINANCIAL ANALYSIS:
2.1.1 RATIO ANALYSIS:
TABLE NO: 2.1.1.1 CURRENT RATIO
YEAR CURRENT CURRENT RATIO

ASSET LIABILITY
2014-2015 9464.63 5674.71 1.6
2015-2016 10156.86 5466.31 1.8
2016-2017 9709.60 4131.45 2.3
2017-2018 11552.20 4185.81 2.7
2018-2019 12998.14 4053.98 3.2
FIGURE NO: 2.1.1.1 CURRENT RATIO
Current ratio
3.5
3
2.5
2
1.5 Current ratio
1
0.5
0
2014-2015 2015-2016 2016-2017 2017-2018 2018-2019
INTERPRETATION:
Standard current ratio 2.1 higher ratio that is more than 2.1 indicates sound solvency position.
Current ratio represents a margin of safety for the condition. Lower ratio indicates in inadequate
working capital. Ratio is high in the year 2018- 2019 and ratio is low in the year 2014-2015.
28
TABLE NO: 2.1.1.2 LIQUID RATIO
YEAR LIQUID ASSET CURRENT RATIO

LIABILITY
2014-2015 5581.32 5674.71 0.9
2015-2016 6290.48 5466.31 1.1
2016-2017 5842.63 4131.45 1.4
2017-2018 7171.96 4185.81 1.7
2018-2019 7669.59 4053.98 1.8
FIGURE NO: 2.1.1.2 LIQUID RATIO
Liquid ratio
2
1.5
1
Liquid ratio
0.5
0
2014-2015 2015-2016 2016-2017 2017-2018 2018-2019
INTERPRETATION:
Liquid ratio is obtained by liquid asset to current liability. The standard limit of liquid ratio is 1.1
in the year 2014-2015; the liquid ratio is less which indicates the company may struggle to pay it
short term obligations. From the year 2015-2016 to 2018-2019, the liquid ratio is high in which it
can be utilized in the other area.
29
TABLE NO: 2.1.1.3 FIXED ASSET RATIO
YEAR FIXED ASSET LONG TERM RATIO

FUNDS
2014-2015 6057.55 11140.66 0.5
2015-2016 5270.95 12246.83 0.4
2016-2017 5817.73 15156.57 0.3
2017-2018 6144.01 16765.35 0.3
2018-2019 5687.34 18287.54 0.3
FIGURE NO: 2.1.1.3 FIXED ASSET RATIO
Fixed Asset ratio

0.6
0.5
0.4
0.3
Fixed Asset ratio
0.2
0.1
0
2014-2015 2015-2016 2016-2017 2017-2018 2018-2019
INTERPRETATION:
High fixed Asset ratio indicates better utilization of fixed assets and low ratio means inefficient
or under utilization of fixed asset. In the year 2014-2015 the fixed asset ratio is high which
denotes better utilization of fixed asset and in the year 2017-2018 to 2018-2019 the fixed asset
ratio is less which means inefficient use of fixed asset.
30
TABLE NO: 2.1.1.4 DEBT EQUITY RATIO
YEAR TOTAL SHAREHOLDER’S RATIO

LIABILITIES EQUITY
2014-2015 276.79 1088.71 0.25
2015-2016 263.29 1192.26 0.22
2016-2017 149.13 1382.79 0.11
2017-2018 124.79 1564.33 0.08
2018-2019 91.86 1724.10 0.05
FIGURE NO: 2.1.1.4 DEBT EQUITY RATIO
Debt-Equity ratio
0.3
0.25
0.2
0.15
Debt-Equity ratio
0.1
0.05
0
2014-2015 2015-2016 2016-2017 2017-2018 2018-2019
INTERPRETATION:
Debt equity ratio shows the relationship between the debt and owner’s fund in the company. In
the year 2016- 2017, the debt- equity ratio was quiet low. Debt was 0.11 times that of owner’s
fund; it shows the long term solvency capacity of the company. The highest debt is in the year
2014-2015 and it decreases in the year 2018-2019 in which the company should take necessary
steps to increases long term solvency.
31
TABLE NO: 2.1.1.5 WORKING CAPITAL TURNOVER RATIO
YEAR SALES NET WORKING TIMES

CAPITAL
2014-2015 20187 3790 5.3
2015-2016 19168 4143 4.6
2016-2017 20800 5578 3.7
2017-2018 23305 7366 3.1
2018-2019 26556 8944 2.9
FIGURE NO: 2.1.1.5 WORKING CAPITAL TURNOVER RATIO
Working capital turnover ratio

6
5
4
3
2 Working capital turnover
1 ratio
0
INTERPRETATION:
From the above data the financial year 2014-2015 has the higher ratio which indicates the better
working capital condition of the company. In the year 2018-2019 there is a decreases in working
capital from the previous year this is due to decrease in the net working capital which means that
the company invested excess cash to generate higher rate of return.
32
TABLE NO: 2.1.1.6 NET PROFIT RATIO
YEAR NET PROFIT NET SALES RATIO

AFTER INTEREST
AND TAX
2014-2015 1326.01 20187 6.5
2015-2016 1427.91 19168 7.4
2016-2017 1837.80 20800 8.9
2017-2018 2155.96 23305 9.2
2018-2019 2476.78 26556 9.3
FIGURE NO: 2.1.1.6 NET PROFIT RATIO
Net Profit ratio

10
4 Net Profit ratio
0
2014-2015 2015-2016 2016-2017 2017-2018 2018-2019
INTERPRETATION:
The increases in the Net profit ratio indicate the company has an ability to earn net profit. While
in the year 2014-2015 the net profit ratio is less because the company has ineffective cost
structure. In the year 2018-2019 the net profit ratio is high which denotes the company is able to
effectively control its cost and earns profit.
33
TABLE NO: 2.1.1.7 FIXED ASSET TURNOVER RATIO
YEAR NET SALES FIXED ASSET FIXED ASSET

TURNOVER
RATIO
2014-2015 20187 6057.55 3.33
2015-2016 19168 5270.95 3.63
2016-2017 20800 5817.73 3.57
2017-2018 23305 6144.01 3.79
2018-2019 26556 5687.34 4.66
FIGURE NO: 2.1.1.7 FIXED ASSET TURNOVER RATIO
Fixed Asset Turnover ratio

5
3
Fixed Asset Turnover ratio
2
0
2014-20152015-20162016-20172017-20182018-2019
INTERPRETATION:
High fixed Asset turnover ratio indicates better utilization of fixed assets and low ratio means
inefficient fixed asset. In the year 2018-2019 the fixed asset ratio is high which denotes better
utilization of fixed asset and in the year 2014-2015 to 2017-2018 the fixed asset ratio is less
which means inefficient use of fixed asset.
34
TABLE NO: 2.1.1.8 DEBTORS TURNOVER RATIO
YEAR TOTAL SALES DEBTORS TIMES

2014-2015 20187 3934.69 5.1
2015-2016 19168 3825.22 5.0
2016-2017 20800 3876.69 5.3
2017-2018 23305 4255.71 5.4
2018-2019 26556 4922.41 5.3
FIGURE NO: 2.1.1.8 DEBTORS TURNOVER RATIO
Debtors Turnover ratio

5.5
5.4
5.3
5.2
5.1 Debtors Turnover ratio
5
4.9
4.8
2014-2015 2015-2016 2016-2017 2017-2018 2018-2019
INTERPRETATION:
The Debtors turnover ratio measures the efficiency with which the company has collected on
their credit that had extended on its customers. In the year 2018-2019, the debtors turnover ratio
is high which denotes the account receivables is efficient and it has high proportion that the
customers to pay their debt quickly. While in the year 2015-2016, there is decreases in the ratio
due to bad credit policies and not credit worthy.
35
TABLE NO: 2.1.1.9 NET PROFIT MARGIN
YEAR NET PROFIT TOTAL LOANS NET PROFIT

AND ADVANCES MARGIN
2014-2015 1326.01 184.78
7.17
2015-2016 1427.91 303.12
4.71
2016-2017 1837.80 17.94
102.44
2017-2018 2155.96 10.78
199.99
2018-2019 2476.78 2.69
920.73
FIGURE NO: 2.1.1.9 NET PROFIT MARGIN
Net Profit Margin

1000
800
600
400
Net Profit Margin
200
0
INTERPRETATION:
It establishes a relationship between net profit after tax and total loans and advances indicates the
efficiency of the management. The above table depicts the net profit ratio of CUMI ha varied
every year from 2015-2019. The highest value of 2019 is 920.73.
36
TABLE NO: 2.1.1.10 PROPRIETARY RATIO
YEAR SHAREHOLDERS TOTAL ASSETS PROPRIETARY

FUND RATIO
2014-2015 8598.90 4826.43 1.78

2015-2016 9470.09 5325.08 1.77
2016-2017 10550.30 12973.16 0.81
2017-2018 11696.70 14358.60 0.81
2018-2019 12768.78 15257.80 0.83
FIGURE NO: 2.1.1.10 PROPRIETARY RATIO
Proprietary ratio
2
1.5
1
0.5 Proprietary ratio
0
INTERPRETATION:
Proprietary ratio of CUMI from 2014-2015 to 2018-2019. It relationship between net worth and
total assets. Higher proprietary ratio means strong financial position of the company and better
security for creditors. Lower ratio indicates more amounts of borrowed funds. Here ratio ranges
from 1.78 to 0.83. This shows the net worth of the company decreasing day by day.
37
2.1.2 WORKING CAPITAL:
TABLE NO: 2.1.2.1 WORKING CAPITAL FOR THE YEAR 2015 – 2016:
Particulars N Changes in working

O Balances capital
2015 2016 Increases Decreases
Assets:
Current assets:
Inventories 15 2084.23 2252.37 168.14 -
Trade receivables 16 2242.85 2532.14 289.29 -
Cash & bank balances 17 66.63 98.50 31.87 -
Short term loan & adv 18 432.72 442.07 9.35 -
Total assets(A) 4826.43 5325.08
Liabilities:
Current liabilities:
Short term borrowing 8 316.19 325.51 - 9.32
Trade payables 9 933.69 1018.46 - 84.77
other current liabilities 10 501.83 1054.30 - 552.47
Short term provision 11 135.70 24.90 110.8 -
Total liabilities(B) 1887.41 2423.17
Working capital(A-B) 2939.02 2901.91
increases in a working capital - 37.11 37.11 -
Total 2939.02 2939.02 646.56 646.56
INTERPRETATION:
From the above working capital of the year 2015 and 2016 shows that the company has acquired
profit for the year 2016 is Rs 2939.02 which is higher than previous year in this comparison.
This shows the company has reduces their expenses and performing well.
38
TABLE NO: 2.1.2.2 WORKING CAPITAL FOR THE YEAR 2016 – 2017:
Particulars N Changes in working capital

O Balances
Assets:
Current assets:
Inventories 15 2252.37 2267.72 15.35 -
Cash & bank balances 17 98.50 79.26 - 19.24
Short term loan & adv 18 442.07 597.85 155.78 -
Total assets(A) 5325.08 5507.67
Liabilities:
Short term borrowing 8 325.51 - 325.51 -
Trade payables 9 1018.46 1339.36 - 320.9
other current liabilities 10 1054.30 116.57 937.73 -
Short term provision 11 24.90 39.46 - 14.56
increases in a working 1110.37 - - 1110.37
capital
Total 4012.28 4012.28 1465.07 1465.07
INTERPRETATION:
From the above working capital of the year 2016 and 2017 shows that the company has
decreases for the year 2017 is Rs 4012.28 which is lesser than previous year in this comparison.
This shows that company has to reduces their expenses.
39
TABLE NO: 2.1.2.3 WORKING CAPITAL FOR THE YEAR 2017- 2018:
Particulars N Changes in working capital

O Balances
Assets:
Current assets:
Inventories 15 2267.72 2603.98 336.26 -
Cash & bank balances 17 79.26 208.43 129.17 -
Other current assets 18 554.25 370.33 - 183.92
Total assets(A) 5464.07 6450.18
Liabilities:
Short term borrowing 8 - 10.78 - 10.78
Trade payables 9 1339.36 1668.66 - 329.3
other current liabilities 10 116.57 61.39 55.18 -
Short term provision 11 39.46 39.10 0.36 -

increases in a working capital 701.57 - - 701.57
Total 4670.25 4670.25 1225.57 1225.57
INTERPRETATION:
This shows that company has to reduces their expenses and try to increases the profit.
40
TABLE NO: 2.1.2.4 WORKING CAPITAL FOR THE YEAR 2018– 2019:
Particulars N Changes in working

O Balances capital

Assets:
Current assets:
Inventories 15 2603.98 3390.34 786.36 -
Cash & bank balances 17 208.43 172.41 - 36.02
Other current assets 18 370.33 384.17 13.84 -
Total assets(A) 6450.18 7251.99
Liabilities:
Short term borrowing 8 10.78 2.69 8.09 -
Trade payables 9 1668.66 2109.89 - 441.23
other current liabilities 10 61.39 61.45 - 0.06
Short term provision 11 39.10 43.52 - 4.42

increases in a working capital 364.19 - - 364.19
Total 5034.44 5034.44 845.92 845.92
INTERPRETATION:
The company has to reduces their inventories so that expenses will be reduces. This shows the
company has to concentrate on their expenses and try to gain a profit.
41
2.1.3. COMPARATIVE BALANCESHEET:
TABLENO: 2.1.3.1 COMPARATIVE BALANCE SHEET OF THE YEAR 2015 -2016:
Particulars N 2015 2016 Absolute Percentage

o change change
A(Rs) B(Rs) C=B-A D=C/A*100
EQUITY&LIABILITIES
Share capital 12 188.18 188.38 0.2 0.10%

Reserves and surplus 13 8410.72 9281.71 870.99 10.35%
NON-CURRENT LIABILITIES
Long-term borrowings 14 512.21 259.46 -252.75 49.34%

Deferred tax liabilities 16 412.51 378.82 -33.69 -8.16%
Long term provision 15 66.36 58.15
CURRENT LIABILITIES
Short term borrowing 8 316.19 325.51 9.32 2.94%

Trade payables 17 912.20 1018.46 106.26 11.64%
Other current liabilities 19 501.83 1054.30 552.47 110.09%
Short term provision 15 135.70 24.90 -110.8 -81.65%
Total 11455.90 12589.69 1133.79 9.896%
NON-CURRENT ASSETS
Fixed assets 4 176.39 4515.13 4338.74 2459.74%

Non-current investment 6 2375.0 2446.36 71.36 3.0046%
Long-term loans advance 14 184.78 303.12 118.34 64.04%
CURRENT ASSETS
Inventories 9 2084.23 2252.37 168.14 8.0672%

Trade receivables 10 2242.85 2532.14 289.29 12.898%
Cash &bank balances 11 66.63 98.50 31.87 47.83%
Short term loans advances 18 432.72 442.07 9.35 2.160%
Total 11455.90 12589.69 1133.79 9.896%
INTERPRETATION: From the above balance sheet of the year 2015 and 2016 shows that the
company has acquired profit for the year 2016 is Rs 12589.69 which is higher than previous
year. The company tried to reduce the expenses for the year. This resembles the company is
performing well.
42
TABLENO: 2.1.3.2COMPARATIVE BALANCES SHEET OF THE YEAR 2016 - 2017:

o change change
EQUITY&LIABILITIES
Share capital 12 188.38 188.66 0.28 0.14%

NONCURRENT
LIABILITIES
Long-term borrowings 14 259.46 17.94 -241.52 -93.08%
Long term provision 15 58.15 43.84 -14.31 -24.60%
CURRENT LIABILITIES
Short term borrowing 8 325.51 116.57 -208.94 -64.18%

Trade payables 17 1018.46 1339.36 320.9 31.50%
Other current liabilities 19 1054.30 525.04 -529.26 -50.20%
Short term provision 15 24.90 39.46 14.56 58.47%
Total 12589.69 12973.16 383.47 3.045%
NON-CURRENT ASSETS
Fixed assets 4 4515.13 4004.01 -511.12 -11.32%

Non-current investment 6 2446.36 3361.61 915.25 37.41%
Long-term loans advance 14 303.12 99.87 -203.25 -67.05%
CURRENT ASSETS
Inventories 9 2252.37 2267.72 15.35 0.68%

Cash &bank balances 11 98.50 12.21 -86.29 -87.60%
Total 12589.69 12973.16 383.47 3.045%
company has increased for the year 2017 is Rs12973.16which is greater than previous year
2016.The company reduces the expenses for the year 2017.This resembles that the company is
performing well.
43
TABLENO: 2.1.3.3 COMPARATIVE BALANCES SHEET OF THE YEAR 2017 - 2018:

o change change
EQUITY&LIABILITIES
Shareholder’s fund
Share capital 12 188.66 188.96 0.3 0.15%
NON-CURRENT
LIABILITIES
Long term provision 15 43.84 56.95 13.11 29.90%
CURRENT LIABILITIES

Trade payables 17 1339.36 1668.66 329.3 24.58%
Other current liabilities 19 525.04 61.39 -463.65 -88.30%
Short term provision 15 39.46 39.10 -0.36 -0.91%
Total 12973.16 14358.60 1385.44 10.67%
NON-CURRENT ASSETS
Fixed assets 4 4004.01 4255.96 251.95 6.29%

Non-current investment 6 3361.61 2951.18 -410.43 -12.20%
CURRENT ASSETS
Inventories 9 2267.72 2603.98 336.26 14.82%

Total 12973.16 14358.60 1385.44 10.67%
company has acquired profit for the year 2018 is Rs 14358.60which is higher than previous year
in this comparison. This shows the company is performing well in the year 2017 than 2018.
44
TABLENO: 2.1.3.4 COMPARATIVE BALANCES SHEET OF THE YEAR 2018 - 2019:

o change change
EQUITY&LIABILITIES
Shareholder’s fund
Share capital 12 188.96 189.15 0.19 0.10%
NON-CURRENT
LIABILITIES
Long term provision 15 56.95 59.36 2.41 4.23%
CURRENT LIABILITIES

Trade payables 17 1668.66 1452.10 -216.56 -12.97%
Other current liabilities 19 61.39 61.45 0.06 0.09%
Short term provision 15 39.10 43.52 4.42 11.30%
Total 14358.60 15257.80 899.2 6.26%
NON-CURRENT ASSETS
Fixed assets 4 4255.96 3638.51 -617.45 -16.96%

Non-current investment 6 2951.18 2883.11 -68.07 -2.36%
CURRENT ASSETS
Inventories 9 2603.98 1390.34 -1213.64 -87.29%

Total 14358.60 15257.80 899.2 6.26%
company has acquired profit for the year 2019 is Rs 15257.80 which is higher than previous year
in this comparison. This shows the company is performing well in the year 2018 than 2019.
45
2.1.4 COMMON SIZE BALANCE SHEET
TABLENO: 2.1.4. COMMON SIZE BALANCESHEET:
PARTICULARS N 2015 2016 2017 2018 2019

O
EQUITY&LIABILITIES
Share capital 12 188.18 188.38 188.66 188.96 189.15

Reserves and surplus 13 8410.72 9281.71 10361.64 11507.74 12579.63
8598.90 9470.09 10550.30 11696.70 12768.78
NONCURRENTLIABILITI
Long-term borrowings 14 512.21 259.46 17.94 10.78 2.69

Deferred tax liabilities 16 412.51 378.82 340.65 260.79 212.01
Long term provision 15 66.36 58.15 43.84 56.95 59.36
991.08 696.43 402.43 328.52 274.06
CURRENT LIABILITIES
Short term borrowing 8 316.19 325.51 116.57 564.23 657.89

Trade payables 17 912.20 1018.46 1339.36 1668.66 1452.10
Other current liabilities 19 501.83 1054.30 525.04 61.39 61.45
Short term provision 15 135.70 24.90 39.46 39.10 43.52
Total 11455.90 12589.69 12973.16 14358.60 15257.80
NON-CURRENT ASSETS
Fixed assets 4 176.39 4515.13 4004.01 4255.96 3638.51

Non-current investment 6 2375.0 2446.36 3361.61 2951.18 2883.11
Long-term loans advance 14 184.78 303.12 99.87 109.54 1205.64
6629.47 7264.61 7465.49 7316.68 7727.26
CURRENT ASSETS
Inventories 9 2084.23 2252.37 2267.72 2603.98 1390.34

Trade receivables 10 2242.85 2532.14 2562.84 3267.44 3882.85
Cash &bank balances 11 66.63 98.50 12.21 12.76 15.70
Short term loans advances 18 432.72 442.07 664.9 1157.74 2241.65
Total 11455.90 12589.69 12973.16 14358.60 15257.80
46
2.2 ANALYTICAL ANALYSIS:
TABLE NO: 2.2.1 TREND VALUE OF WORKING CAPITAL:
Year working X=x-2017 X2 XY Trend

capital (Y) analysis
2015 293902000 -2 4 -587804000 271080800
2016 290137000 -1 1 -290137000 330678000
2017 396868000 0 0 0 390275200
2018 467025000 1 1 467025000 449872400
2019 503444000 2 4 1006888000 509469600
569066800
Total 1951376000 0 10 595972000
Trend Equation: Y= a + b x
A=∑Y/n =1951376000/5= 390275200
b= ∑ XY/∑X2=595972000/10=59597200
FIGURE NO: 2.2.1 WORKING CAPITAL OF TREND ANALYSIS:
trend analysis
600000000
500000000
400000000
300000000
trend analysis
200000000
100000000
0
2015 2016 2017 2018 2019 Total
INTERPRETATION: The working capital is increased to 509469600 the year 2019 compared
with year 2015 the value is 271080800. Finally the value was increased compared to 2015. Then
the approximate value of 2020 is 569066800. The overall trend is good.
47
TABLENO: 2.2.2 THE TREND VALUE OF NET PROFIT:
Year Net profit(Y) X=x-2017 X2 XY Trend

analysis
2015 1326.01 -2 4 -2652.02 1238.97
2016 1427.91 -1 1 -1427.91 1541.93
2017 1837.80 0 0 0 1844.89
2018 2155.96 1 1 2155.96 2147.85
2019 2476.78 2 4 4953.56 2450.81
2753.77
Total 9224.46 0 10 3029.59
Trend Equation: Y= a + b x
a=∑ Y/n =9224.46/5=1844.892
b= ∑ XY/∑ X2=3029.59/10=302.959
FIGURE NO: 2.2.2NET PROFIT OF TREND ANALYSIS:
trend analysis
3000
2500
2000
1500
trend analysis
1000
500
0
2015 2016 2017 2018 2019 Total
INTERPRETATION: The Net profit is increased to 2450.81 the year 2019 compared with year
2015 the value is 1238.97. Finally the value was increased compared to 2015. Then the
approximate value of 2020 is 2753.77. The overall trend is good.
48
CHAPTER III
SUMMARY OF FINDINGS, SUGGESTIONS AND CONCLUSION:
3.1 FINDINGS:
 From the current ratio we find that for the year 2017 the ratio is 2.7 is increases which is
satisfactory of the safety margin is very high. Therefore, the firm should keep more
current asset so that it can maintain a satisfactory safety margin.
 From the quick ratio we find that quick ratio in 2017 I satisfactory the financial position
seems to be good but in 2018 the company has not managed its fund property. Therefore,
the company should rationally utilize its fund to maintain liquid ratio.
 In the year 2014-2015 the fixed asset ratio is high which denotes better utilization of
fixed assets and in the year 2017 and 2018 the fixed assets ratio is less which means
inefficient use of fixed asset.
 In the year 2016-2017, the debt equity ratio was quiet low so the company should take a
necessary step to increases long term solvency.
 There is a decrease in the net working capital ratio which seems that the company
invested excess cash to generate higher rate of return.
 In the year 2018-2019 the net profit ratio is high which denotes the company is able to
effectively control its cost and earn profit.
 In the year 2018-2019 the debtors turnover ratio is high which denotes the account
receivables I efficient of the company.
 In net profit ratio while in the year 2014-2015 the net profit ratio is less because the
company has ineffective cost structure.
 From the working capital of the year 2015 to 2018 the company reduces the expenses in
the year 2015 and in 2016 to 2018 company has increases their day to day expenses.
 In comparative balance sheet the company has acquire profit for the every year when
compare to previous year so this resembles the company is performing well.
49
 In common size balance sheet there is a comparison for five year, In that comparison
2019 acquire more profit when compare to other years so this resembles the company
performing well.
 From the working capital we find that working capital is increased to 509469600 the year
2019 compare with base year 2015 the overall trend is good.
 From the net profit increased to 2450.81 the year 2019. Then the approximate value of
2020 is 2753.77 the overall trend satisfactory.
3.2 SUGGESTIONS:
 The company must take effective measures to avoid decreases working capital must
allocate adequate funds.
 The liquidity position of the firm is average and to take efforts to improved the proper
utilization of the firm
 The cash position of the company is not stable. Its functuating over the year and there is
no standard ratio.
 In 2019, the company has maintained good revenue so in upcoming years the company
should innovative further steps to increase the revenue.
 The efforts must be taken to reduce the manufacturing cost of realize the higher profit.
 The company must make a short term investment regularly which would help to increase
the income from investment.
50
3.3 CONCLUSION:
The study helped to understand and gain knowledge and experience about the financial aspects
of the company. The study was mainly concentrated on comparative statements and ratio
analysis of CUMI Company. It has given a clear idea about the liquidity, profitability and other
financial aspects of the company.
The study has been done using the profit and loss accounts, balance sheet and other financial
documents of the company, which helped to maintained accuracy throughout the study.
The project study was conducted to measure the financial performance of the company. Looking
into performance of last five years of Carborundum universal limited company must make
effective utilization of funds then only increases the profit and must less their liabilities and
expenses which would help to increases the profit of the firm.
Finding of their research would contributed to the company to formulate the growth of the
organization and also suggestions would help the company to overcome the problems to improve
the performance of the organization and thus these will help the company to run good and earn
more profit and its would help the company to attain a greater position.
51
BIBLIOGRAPHY:
Jagannadha rao.,“ Analysis of financial statements” – Lambert academic publishing , New Delhi,
2011.
Suresh vaddi , “Management accounting” – Eastern Law house, Calcutta, 2011.
Frogmen J. M.,”Accounting for managerial analysis”- Homewood, Irwin, 2014
Gosh P.K and gupta S.C.,” Fundamental of management accounting”- National publishing
house, New Delhi, 2nd Ed., 2015.
Ingrain N.L. and Ramanathan A.R.,” management accounting”- sultan chand and sons, Delhi,
2018.
Horngren C.T.,” Accounting for management Control”- Englewood cliffs, prentice Hall, 2018.
JOURNAL:
Ms.M.Ganga, M. (2015, April). Evaluation of Financial Performance. International Journal of

Scientific and Research Publications, pp. 1-6.
Dr. M. Ravichandran, M. V. (2016). A Study on Financial Performance Analysis of Force

Motors Limited. International Journal for Innovative Research in Science & Technology, 662-
666.
Finance India, published by Indian institute of finance, Delhi
Indian Economics Review, Published by Delhi school of economics, Delhi
MAGAZINE/NEWS PAPER:
The Financial Express
The Economic Times

52
WEBSITE:
1. www.murugappa.com
2. www.cumi-murugappa.com
3. https://www.google.com/search?q=ratio+analysis&oq=RATIO+ANALYSIS&aq=chrom
e.0.016.7135j0j4&sourceid=chrome&ie=UTF-8
53
APPENDIX:
Balance sheet for the year 2014-2015

54

55

56

57

A Study On Financial Performance Analysis of Carborundum Universal LTD by Sowmiya P Register No. 412518631092

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A STUDY ON FINANCIAL PERFORMANCE ANALYSIS OF

CARBORUNDUM UNIVERSAL LTD

This is to certify that this internship titled “A STUDY ON FINANCIAL PERFORMANCE

Dr. S. SANKAR Dr. K. MARAN

Signature of the Guide Signature of the Director

INTERNAL EXAMINER EXTERNAL EXAMINER

I am thankful to the management of SRI SAIRAM INSTITUTE OF MANAGEMENT

CHAPTER.NO. TITLE PAGE NO.

DATA ANALYSIS AND INTERPRETATIONS 27

S.NO TITLE PAGE NO

S.NO TITLE PAGE NO

1.1 INTRODUCTION TO THE STUDY:

1.2 INDUSTRY PROFILE:

TABLENO: 1.2 INDUSTRY PROFILE

founded 1900,119 yrs ago

Key people M.M.Muruappan

products Cycles, general insurance fertilizers,

Cholamandalam investment and finance company Limited is a finance company Limited is a

MURUGAPPA MORGAN THERMAL CERAMICS LIMITED:

COROMANDEL INTERNATIONAL LTD:

TUBE INVESTMENTS OF INDIA LIMITED:

MURUGAPPA ORGANO WATER SOLUTIONS LIMITED:

Amidst a rapidly growing Indian manufacturing sector, MurugappaOrgano Water Solutions is a

WENDT INDIA LIMITED:

PARRY AGRO INDUSTRIES LIMITED:

1.3 COMPANY PROFILE:

“CARBORUNDUM UNIVERSAL LIMITED (CUMI)”

TABLE NO: 1.3 COMPANY PROFILE

Headquarters Chennai, Tamil Nadu,

Products Abrasives, electro minerals,

Coated abrasives is an abrasives grain bonded to a flexible substrate using

Metalworking is the process of working with metals to create individual parts,

Aluminum oxide is a chemical compound of aluminum and oxygen with the

 REACTION BONDED SILICON CARBIDE (RbSiC):

Reaction bonded silicon carbide also known as siliconized silicon carbide is a

Zirconium sometimes known as zirconia is the white crystalline oxide of

 YTTRIA-STABILIZED ZIRCONIA (YSZ):

Yttria-stabilized I a ceramic in which the cubic crystal structure of zirconium

The IUPAC defines calcinations as heating to high temperatures in air or oxygen.

Bauxite is a sedimentary rock with a relatively high aluminum content. It is the

1.4 REVIEW OF LITERATURE:

A study has been undertaken by Ms. M. Ganga(Ms.M.Ganga, 2015) on the evaluation of

DR. M. RAVICHANDRAN (2016):

1.5 NEED FOR THE STUDY:

It also includes lack of comparability between companies, no indication of cause of changes,

1.6 OBJECTIVES OF THE STUDY:

 To analysis the financial performance of Carborundum universal Ltd (CUMI).

 To study the growth of CUMI company.

 To identify the variability in profitability, liquidity, Solvency position in the

 To examine the operational competence of CUMI.

 To study the investment pattern of the company.

 To give suggestions to improve the overall performance.

1.7 SCOPE AND SIGNIFANCE OF THE STUDY:

1.8 RESEARCH METHODOLOGY:

5. DATA COLLECTION METHOD:

This report is prepared based on information collected from secondary sources.

 Annual Reports of CUMI

 Online data from CUMI website.

 Several articles related on financial analysis and selected books.

 Comparative balance sheet.

 Common size balance sheet.

3. FIXED ASSET RATIO: